The Hindu Business Line : Bear onslaught

BEARS were in total control of Wednesday's trading. The day's market action initiated the downtrend in most of the tradable counters. The sentiment reading of the tradable counters stands strongly bearish, with no uptrend counters.

Nifty Futures recommendation: The near-month January contract opened with a bear gap of seven points and subsequently fell by a whopping 108 points. During the last hour of trading, the bulls managed to stage a partial recovery. The January contract moved within a band of 107 points, registering an intra-day low of 1997. It closed with a substantial loss of 86 points over Tuesday's close.

Click here for table

Bear domination during the day reversed the uptrend in the January contract. The long trade exited with a nominal profit of six points. The initiated short position is unlikely to be disturbed on Thursday. The exit and bullish trigger levels for the January contract are placed far away.

Stock Futures recommendation: The composition of the top-10 active counters list underwent a change. ONGC gained entry with the exit of Ranbaxy. The top-three traded counters in this segment were Tata Steel, State Bank and Reliance. The exit level for the short position in Ranbaxy is placed at 1253.05.

Except for Tata Steel, all the other counters in the list are in the downtrend. Bull pressure on Wednesday is likely to terminate the downtrend in Infosys and Reliance. Entry levels for all the counters are placed at far away. The best bet for Thursday's trading would be the buying in Reliance. This counter is in the downtrend. Bull move on Thursday may initiate the uptrend.

Cash segment: There were no new entries or exits to the top-10 tradable list. Its ranking underwent a change, with Maruti and SAIL interchanging positions. The bears were successful in triggering the downtrend in the recommended counter, Infosys.

All the counters in the list are in the downtrend. Except for Infosys and Reliance, all the other counters are likely to be safe. Bullish trigger levels for all the counters are placed at a far away level. The entry level for Infosys is the nearest among all the counters in the list. Bull domination on Thursday has the potential to reverse the prevailing downtrend in Infosys.

(Note: All price levels refer to the absolute value of the shares traded on the NSE. There is risk of loss in trading.)

The author is a technical analyst and fund management consultant.

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Kotak Mutual launches Mid-Cap Fund

Union Bank to sell Principal MF products

Bear onslaught

BSE-Indonext: Many mid-cap firms feel entry norms stringent

Hopes on revival of Coimbatore bourse

Sensex crashes, market baffled — 316-point drop intra-day; Nifty loses 71 points

Margin calls trigger fall

Global impact leaves market gasping

Basket selling triggers collapse

Nifty, Tata Steel may turn positive

Public sector stocks lead the plunge